Financial Performance - For Q1 2025, net income was $21.1 million, or $0.17 per diluted share, down from $24.3 million in Q4 2024[1] - Noninterest income for Q1 2025 totaled $15.7 million, a 5% increase from $14.9 million in Q4 2024 when excluding a one-time gain[5] - The provision for credit losses significantly decreased by 52% to $4,800,000 from $10,000,000 in the previous quarter[31] - Return on average assets (ROA) was 0.49% for the quarter, down from 0.57% in the previous quarter[33] - Return on average equity (ROE) decreased to 3.93% from 4.51% in the prior quarter[33] - Earnings per common share (diluted) was $0.17, down from $0.20 in the previous quarter[31] - Pre-provision net revenue (PPNR) for the three months ended 3/31/2025 was $32,644 million, down from $40,426 million for the previous quarter[50] - Efficiency ratio excluding notable items was 69.82% for the three months ended 3/31/2025, compared to 65.81% for the previous quarter[52] Asset and Deposit Management - Total deposits increased by 1% to $14.49 billion in Q1 2025, driven by a 5% rise in money market deposits[12] - Total assets remained stable at $17.07 billion as of March 31, 2025, compared to $17.05 billion at December 31, 2024, reflecting no significant change[29] - Deposits increased by 1% to $14.49 billion at March 31, 2025, from $14.33 billion at December 31, 2024[29] - Noninterest bearing demand deposits fell by 6% to $3,344,732 million, while interest bearing deposits increased by 1% to $11,126,727 million[37] - Total deposits increased by 1% to $14,488,319 million compared to $14,327,489 million in the previous quarter[37] Loan and Credit Quality - Net charge-offs for Q1 2025 were $8.3 million, or 0.25% of average loans, down from $12.8 million in Q4 2024[17] - Nonperforming assets decreased by 8% quarter-over-quarter to $83.9 million, representing 0.49% of total assets[16] - The allowance for credit losses was $147.4 million, unchanged at 1.11% of loans receivable[20] - Total accruing delinquent loans 30-89 days past due increased to $39,646 million as of 3/31/2025, up from $13,845 million on 12/31/2024[45] - Total criticized loans remained relatively stable at $448,723 million as of 3/31/2025, compared to $449,969 million on 12/31/2024[45] Capital and Equity - As of March 31, 2025, the Common Equity Tier 1 Capital Ratio was 13.28%, up from 13.06% at December 31, 2024, and 12.47% at March 31, 2024[21] - Total stockholders' equity increased to $2.16 billion, or $17.84 per common share, reflecting a 1% increase from $2.13 billion, or $17.68 per common share, at December 31, 2024[21] - Tangible common equity (TCE) per share rose to $13.99 at March 31, 2025, compared to $13.81 at December 31, 2024, marking an increase of 1.3%[22] - The TCE ratio improved to 10.20% at March 31, 2025, up 15 basis points from 10.05% at December 31, 2024, and up 87 basis points from 9.33% at March 31, 2024[22] - The leverage ratio improved to 11.92% from 11.83% in the previous quarter[39] Mergers and Acquisitions - The acquisition of Territorial Bancorp added approximately $1.7 billion in core deposits and $1.0 billion in residential mortgage loans[2] - The merger with Territorial Bancorp was completed on April 2, 2025, resulting in the issuance of 6,976,754 shares, valued at $73.3 million[22] Operational Metrics - Total interest income for the same period was $217,166,000, down 4% from $226,621,000 in the prior quarter[31] - Total noninterest expense increased by 8% to $83,861,000 compared to $77,590,000 in the previous quarter[31] - The efficiency ratio (not annualized) was 71.98%, compared to 65.75% in the previous quarter, indicating a decline in operational efficiency[33] - Gross loans decreased by 2% to $13,335,477 million compared to $13,632,763 million in the previous quarter[37] - Average assets decreased to $17,084,378 million for the three months ended 3/31/2025, down from $17,228,881 million in the previous quarter[50] Upcoming Events - The investor conference call to discuss the first quarter results is scheduled for April 22, 2025, at 9:30 a.m. Pacific Time[23]

Financial Instruments and Capital Management - The company has issued $126.0 million of pooled trust preferred securities through nine wholly-owned subsidiary grantor trusts[35]. - The company paid off $197.1 million of convertible note principal in cash on May 15, 2023, following the exercise of put rights by most holders[36]. - The Bank is subject to capital adequacy requirements under the Basel III Capital Rules, which became effective on January 1, 2015[53]. - The minimum capital ratios under the Basel III Capital Rules include a common equity Tier 1 capital ratio of 7.0%, a Tier 1 capital ratio of 8.5%, and a total capital ratio of 10.5%[56]. - As of December 31, 2024, Hope Bancorp and the Bank met all requirements under the Basel III Capital Rules, exceeding the minimum percentage requirements to be deemed "well-capitalized"[56]. - The Bank's ability to pay dividends is subject to restrictions under Delaware law and the FRB's policy, which requires maintaining adequate capital ratios[79]. Loan Products and SBA Lending - The maximum gross loan amount for SBA loans to any one small business borrower is $5.0 million, with a maximum SBA guaranteed amount of $3.75 million[23]. - The company has been designated as an SBA Preferred Lender, facilitating a more efficient marketing and approval process for SBA loans[27]. - The company resumed sales of the guaranteed portion of its SBA 7(a) loans during the 2024 second quarter as secondary market premium rates increased[24]. - The company offers SBA 504 loans for purchasing owner-occupied commercial real estate or long-term capital equipment, typically extended for up to 20 years[25]. - The company funded approximately $2.24 billion in loans in 2024, with 528 CRA-reportable small business loans totaling $196.2 million[88]. Branch Network and Community Engagement - The company has 46 branches across the United States, with 25 located in California and nine in New York and New Jersey[37]. - Approximately 37% of the Bank's branches are located in low-to-moderate income areas, reflecting its commitment to community investment[88]. - The company awarded 60 scholarships of $2,500 each in 2024, contributing over $3.0 million to the Hope Scholarship Foundation since its establishment[88]. - The company is committed to funding affordable housing partnerships and has made investments in CRA and tax credit projects[347]. Regulatory Compliance and Risk Management - Hope Bancorp has not elected financial holding company status and does not engage in activities determined by the FRB to be financial in nature[47]. - The Bank received a "Satisfactory" rating in the most recent public disclosure of CRA performance evaluation released by the FDIC in 2024[67]. - The Dodd-Frank Act requires banking organizations with consolidated assets exceeding $10 billion to establish board-level risk committees and perform annual stress tests[59]. - The Bank is subject to periodic examination by the CFPB with respect to compliance with federal consumer financial laws[61]. - The new CRA rules issued in 2024 will become effective on January 1, 2026, with data reporting requirements effective on January 1, 2027[68]. - The Bank must comply with numerous federal and state consumer protection statutes, including the Fair Debt Collection Practices Act and the Truth in Lending Act[65]. - The Bank is required to establish anti-money laundering programs under the USA PATRIOT Act and the Bank Secrecy Act[69]. - The CFPB has the authority to examine the Bank, which is subject to regulations affecting financial institutions with assets over $10 billion[81]. Financial Performance and Economic Conditions - The company primarily attracts deposits through a wide range of products and services, including personal and business checking accounts, savings accounts, and time deposit accounts[30]. - The company’s investment portfolio aims to manage interest rate risk while generating adequate interest income[29]. - The company’s profitability is significantly influenced by interest rate differentials and economic conditions, which are beyond its control[39]. - The FDIC approved a special assessment rate of approximately 13.4 basis points per year, starting in Q1 2024, based on estimated uninsured deposits as of December 31, 2022[76]. - The company recorded expenses of $691 thousand in 2024 and $4.0 million in 2023 related to the special assessment[76]. - As of December 31, 2024, total contractual obligations and commitments amounted to $8.82 billion, with $7.58 billion due within one year[348]. - The Bank had 1,244 full-time equivalent employees as of December 31, 2024, with no union representation[86].

Core Points - Territorial Bancorp Inc. reported a net loss of $1.72 million, or $0.20 per diluted share, for the three months ended December 31, 2024, primarily due to $1.53 million in pre-tax merger-related expenses [1] - The Board of Directors approved a dividend of $0.01 per share, expected to be paid on February 28, 2025 [2] - The merger agreement with Hope Bancorp, Inc. involves a stock-for-stock transaction valued at approximately $78.60 million, with a fixed exchange ratio of 0.8048 shares of Hope Bancorp common stock for each share of Territorial Bancorp common stock [3][4] Financial Performance - Net interest income decreased by $2.21 million to $7.21 million for the three months ended December 31, 2024, compared to the same period in 2023 [5][22] - Total interest income was $17.91 million, a slight increase from $17.69 million in the previous year, driven by higher interest earned on loans and other investments [5] - Total interest expense increased by $2.42 million to $10.70 million, primarily due to higher costs associated with certificates of deposit and savings accounts [6][22] Asset Quality - The ratio of non-performing assets to total assets was 0.09% at December 31, 2024, compared to 0.10% at December 31, 2023 [7][15] - The allowance for credit losses was $5.11 million, representing 0.40% of total loans, slightly up from 0.39% in the previous year [15][27] Balance Sheet Highlights - Total assets decreased to $2.17 billion at December 31, 2024, from $2.24 billion a year earlier [13][25] - Deposits increased by $81.06 million to $1.72 billion, primarily due to deposits from state and local governments [14][25] - Loans receivable decreased by $21.89 million to $1.29 billion, attributed to loan repayments exceeding new originations [13][25] Noninterest Income and Expenses - Noninterest income increased by $139,000 to $742,000, mainly due to a decrease in pension expenses [10][22] - Noninterest expense rose by $1.42 million to $10.90 million, largely due to increased general and administrative expenses, including $1.53 million in merger-related costs [11][22] Capital Ratios - The tier one leverage and risk-based capital ratios were 11.68% and 28.96%, respectively, indicating the company is well-capitalized [7] - The efficiency ratio was 137.09%, reflecting higher noninterest expenses relative to income [27]

Financial Data and Key Metrics Changes - For Q4 2024, the company reported net income of $24.3 million, or $0.20 per diluted share, with pre-provision net revenue of $40 million, up 14% from Q3 2024 [9][10] - Total deposits decreased by 3% to $14.3 billion, influenced by the sale of Virginia branches and typical year-end fluctuations [14] - Net interest income totaled $102 million, a decrease of 3% from Q3 2024, with a net interest margin of 2.50%, down 5 basis points quarter-over-quarter [19][20] Business Line Data and Key Metrics Changes - Loans receivable stood at $13.6 billion, up 1% on an annualized basis from June 30, 2024, with a 2% increase in average gross loans quarter-over-quarter [11][16] - Non-interest income increased by 34% to $16 million, driven by gains on SBA loans and improved customer activity [21] - Non-interest expense was $78 million, down 5% from the prior quarter, reflecting disciplined expense management [22] Market Data and Key Metrics Changes - The company focused on reducing broker deposits to 7% of total deposits, down from 10% a year ago [11] - The competitive environment for deposits remains high, impacting overall funding costs [62] Company Strategy and Development Direction - The company aims for loan growth in the high single-digit percentage range in 2025, driven by organic growth and the addition of Territorial Bancorp's loans [30] - The strategic focus includes improving the deposit mix, organic loan growth, and strong fee income growth [12] - The company anticipates closing the merger with Territorial Bancorp in Q1 2025, which is expected to enhance profitability and growth [13][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, expecting accelerated earnings growth and profitability [12] - The company is committed to disciplined expense management while investing in talent and technology [32] - The effective tax rate is projected to be around 20% for 2025, benefiting from low-income housing and investment tax credits [32] Other Important Information - The company declared a quarterly common stock dividend of $0.14 per share, payable on February 20, 2025 [14] - Asset quality remains stable, with non-performing assets down 13% quarter-over-quarter [26] Q&A Session Summary Question: Outlook on deposit beta - Management aims to achieve a higher beta than the past cycles, targeting around 80% with proactive measures [38][39] Question: Expense run rate and contributions from Territorial - The 2025 expense growth guidance includes transitional costs from Territorial, with a focus on disciplined expense management [42][44] Question: Securities accretion and transition acceleration - The company is evaluating the securities portfolio and has not specified the accretion from securities yet [50][56] Question: Deposit trends and competitive environment - The competitive pricing environment remains challenging, but the company achieved a 42% beta on interest-bearing deposits [62][64] Question: Loan growth outlook and charge-offs - The company expects moderate loan growth from the C&I side, with manageable charge-off levels anticipated for 2025 [75][77]

2024 Fourth Quarter Earnings Conference Call January 27, 2025 Forward Looking Statements & Additional Disclosures Some statements in this presentation may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements preceded by, followed by or that include the words "will," "believes," "expects," "anticipates," "inten ...

Core Insights - Hope Bancorp reported a revenue of $118.02 million for the quarter ended December 2024, reflecting a 12.7% decrease year-over-year [1] - The company's EPS was $0.20, down from $0.32 in the same quarter last year, with a surprise of +5.26% compared to the consensus estimate of $0.19 [1] - The stock has returned -1.5% over the past month, underperforming the Zacks S&P 500 composite's +1.1% change, and currently holds a Zacks Rank 4 (Sell) [3] Financial Metrics - Efficiency Ratio was reported at 65.8%, slightly above the estimated 65.6% [4] - Net Interest Margin was 2.5%, below the estimated 2.6% [4] - Net charge-offs to average loans were 0.4%, higher than the estimated 0.2% [4] - Average Balance of Total interest-earning assets was $16.27 billion, below the estimated $16.50 billion [4] - Net Interest Income was $102.14 million, compared to the estimated $109.26 million [4] - Net gains on sales of SBA loans were $3.06 million, exceeding the estimated $2.91 million [4] - Total noninterest income was $15.88 million, surpassing the average estimate of $12.74 million [4] - Service fees on deposit accounts were $2.81 million, slightly below the estimated $2.85 million [4]

Core Viewpoint - Hope Bancorp reported quarterly earnings of $0.20 per share, exceeding the Zacks Consensus Estimate of $0.19 per share, but down from $0.32 per share a year ago, indicating a 37.5% year-over-year decline in earnings [1][2] Financial Performance - The company posted revenues of $118.02 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 2.47% and down from $135.2 million year-over-year, reflecting a 12.9% decrease [2] - Over the last four quarters, the company has surpassed consensus EPS estimates only once [2] Stock Performance - Hope Bancorp shares have declined approximately 1.4% since the beginning of the year, while the S&P 500 has gained 3.7% [3] - The current Zacks Rank for Hope Bancorp is 4 (Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.26 on revenues of $136.1 million, and for the current fiscal year, it is $1.19 on revenues of $568.37 million [7] - The trend for estimate revisions ahead of the earnings release was unfavorable, which may impact future stock performance [6] Industry Context - The Banks - West industry, to which Hope Bancorp belongs, is currently in the top 36% of over 250 Zacks industries, suggesting a relatively strong industry performance [8]

Financial Performance - For Q4 2024, net income was $24.3 million, or $0.20 per diluted common share, compared to $24.2 million in Q3 2024[2] - Full-year 2024 net income totaled $99.6 million, or $0.82 per diluted common share, with notable items adjusted net income at $103.4 million, or $0.85 per diluted common share[2] - Net income for the three months ended December 31, 2024, was $24,337, an increase of 1% from $24,159 in the previous quarter, but a decrease of 8% from $26,481 in the same quarter last year[30] - The total revenue for the three months ended December 31, 2024, was $118,016 thousand, a decline of 12.7% from $135,196 thousand for the same period in 2023[51] - The net income excluding notable items for the twelve months ended December 31, 2024, was $103,380 thousand, down 28.6% from $144,646 thousand for the same period in 2023[51] Revenue and Income Sources - Pre-provision net revenue (PPNR) for Q4 2024 increased 14% to $40.4 million from $35.4 million in Q3 2024[5] - Noninterest income rose 34% to $15.9 million in Q4 2024, driven by net gains on the sale of SBA loans and increased customer activity[8] - Total noninterest income increased by 34% from $11,839 in the previous quarter to $15,881 in the current quarter, and increased by 71% from $9,280 in the same quarter last year[30] - The pre-provision net revenue (PPNR) for the three months ended December 31, 2024, was $40,426 thousand, compared to $36,005 thousand for the same period in 2023, reflecting an increase of 11.8%[51] Asset and Liability Management - Total deposits decreased by $402 million, or 3%, to $14.33 billion from $14.73 billion in Q3 2024, influenced by the sale of Virginia branches[12] - Total assets decreased by 2% from $17,354,189 on September 30, 2024, to $17,054,008 on December 31, 2024, and decreased by 11% compared to $19,131,522 on December 31, 2023[28] - Total liabilities decreased by 2% from $15,184,404 on September 30, 2024, to $14,919,503 on December 31, 2024, and decreased by 12% compared to $17,010,279 on December 31, 2023[28] - Total deposits amounted to $14,590,767 with an interest expense of $121,645, resulting in a cost of 3.32%[34] Credit Quality and Loss Provisions - Nonperforming assets decreased to $90.8 million, or 0.53% of total assets, down from $103.8 million, or 0.60% at the end of Q3 2024[15] - The provision for credit losses increased to $10.0 million in Q4 2024 from $3.3 million in Q3 2024, with a full-year provision of $17.3 million compared to $31.6 million in 2023[17] - The allowance for credit losses totaled $150.5 million at December 31, 2024, with an allowance coverage ratio of 1.11% of loans receivable[18] - Net charge offs for Q4 2024 were $12.8 million, or 0.38% of average loans, compared to $5.7 million, or 0.17% in Q3 2024[16] Capital Position - The tangible common equity ratio was over 10% as of December 31, 2024, indicating strong capital position for future growth[2] - The Common Equity Tier 1 Capital Ratio was 13.06%, exceeding the minimum guideline of 6.50% for "well-capitalized" institutions[20] - Total stockholders' equity was $2.13 billion, or $17.68 per common share, down from $2.17 billion, or $17.97 per common share at the end of Q3 2024[20] - Stockholders' equity rose by 5% year-over-year to $2,156,858,000 from $2,048,335,000[38] Mergers and Acquisitions - The company is preparing for the integration of Territorial Savings Bank, expected to complete in Q1 2025, enhancing its deposit base and asset quality[2] - Hope Bancorp is in the process of merging with Territorial Bancorp Inc., with regulatory approvals pending[24] Efficiency and Ratios - The efficiency ratio improved to 65.75% for the three months ended December 31, 2024, compared to 69.67% in the previous quarter and 73.37% in the same quarter last year[32] - The diluted EPS excluding notable items for the three months ended December 31, 2024, was $0.20, down from $0.31 for the same period in 2023[51] - The return on average assets (ROA) for the three months ended December 31, 2024, was 0.57%, slightly up from 0.56% in the previous quarter and up from 0.54% in the same quarter last year[32] - The return on equity (ROE) excluding notable items for the three months ended December 31, 2024, was 4.46%, down from 7.25% in the same period last year[51]

Group 1 - Analysts project that Hope Bancorp (HOPE) will announce quarterly earnings of $0.19 per share, a decline of 40.6% year over year [1] - Revenues are expected to reach $121 million, declining 10.5% from the same quarter last year [1] - The consensus EPS estimate has not been revised over the past 30 days, indicating a stable outlook from analysts [2] Group 2 - The average prediction for 'Average Balance - Total interest earning assets' is $16.50 billion, down from $18.53 billion a year ago [5] - The consensus estimate for 'Net Interest Income' is $109.26 million, compared to $125.92 million reported in the same quarter last year [5] - Analysts estimate 'Total noninterest income' at $12.74 million, an increase from $9.28 million reported in the same quarter last year [6] Group 3 - Hope Bancorp shares have returned -1.5% over the past month, while the Zacks S&P 500 composite has changed by +2.1% [7] - With a Zacks Rank 4 (Sell), HOPE is expected to underperform the overall market in the near future [7]

Financial Performance - Net income for the third quarter of 2024 was $24.16 million, compared to $30.05 million in the same quarter of 2023, reflecting a decrease of about 19.6%[230]. - Net income for Q3 2024 was $24.2 million, a decrease of 19.6% from $30.0 million in Q3 2023[241]. - Net income for the nine months ended September 30, 2024, was $75.3 million, down 29.8% from $107.2 million for the same period in 2023[242]. - Noninterest income for Q3 2024 increased by $3.5 million, or 42.6%, totaling $11.8 million compared to $8.3 million in Q3 2023[268]. - Total noninterest income for the nine months ended September 30, 2024, was $31.2 million, a decrease of $5.1 million, or 14.1%, from $36.3 million in the same period of the prior year[270]. Asset Quality - The provision for credit losses decreased significantly to $3.28 million from $16.86 million year-over-year, indicating improved asset quality[230]. - Provision for credit losses for Q3 2024 was $3.3 million, a decrease of $13.6 million from $16.9 million in Q3 2023[263]. - The allowance for credit losses (ACL) was $153.3 million at September 30, 2024, down from $158.7 million at December 31, 2023, representing 1.13% of loans receivable[300][302]. - Nonperforming assets totaled $103.8 million at September 30, 2024, up from $45.5 million at December 31, 2023, with a nonperforming assets to total assets ratio of 0.60% compared to 0.24%[298][299]. Interest Income and Expenses - Net interest income for the three months ended September 30, 2024, was $104.81 million, down from $135.38 million in the same period last year, representing a decline of approximately 22.6%[230]. - Net interest income for Q3 2024 was $104.8 million, a decrease of 22.6% from $135.4 million in Q3 2023[244]. - The net interest margin for Q3 2024 was 2.55%, a decrease of 28 basis points from 2.83% in Q3 2023[246]. - Total interest income decreased by $52.3 million, with loans contributing a decrease of $38.2 million and interest-earning cash and deposits decreasing by $18.4 million[260]. - The total interest expense decreased by $10,140 thousand, leading to a net interest income decrease of $30,569 thousand for the same period[259]. Capital Position - The tangible common equity (TCE) ratio improved to 10.08% from 7.96% year-over-year, indicating stronger capital position[230][232]. - Common equity tier 1 capital ratio was 13.07% at September 30, 2024, indicating a strong capital position[328]. - Stockholders' equity increased to $2.17 billion at September 30, 2024, up from $2.12 billion at December 31, 2023, driven by net income of $75.3 million[325]. - The company is categorized as "well capitalized" with a common equity tier 1 capital ratio of 13.07% and total capital ratio of 14.82% as of September 30, 2024[328]. Liquidity and Borrowing - Cash and cash equivalents decreased to $680.9 million at September 30, 2024, from $1.93 billion at December 31, 2023, primarily due to the payoff of $1.70 billion of FRB BTFP borrowings[286]. - Total borrowing capacity, cash and cash equivalents, and unpledged securities amounted to $7.57 billion at September 30, 2024, down from $7.66 billion at December 31, 2023[333]. - The company has $4.15 billion available to borrow from the FHLB, with $4.05 billion unused as of September 30, 2024[333]. - The liquidity management strategy focuses on maintaining sufficient funds to meet cash flow requirements arising from fluctuations in deposit levels and daily operations[331]. Operational Efficiency - The efficiency ratio for the quarter was 69.67%, up from 60.42% in the previous year, suggesting increased operational costs relative to income[231]. - Noninterest expense for Q3 2024 was $81.3 million, a decrease of $5.5 million, or 6.4%, from $86.8 million in Q3 2023[274]. - Salaries and employee benefits decreased by $6.9 million, or 13.5%, to $44.2 million in Q3 2024 from $51.0 million in Q3 2023[275]. - Salaries and employee benefits expense decreased by $24.7 million, or 15.4%, for the nine months ended September 30, 2024, compared to the same period in 2023, due to headcount reductions[277]. Shareholder Returns - The bank declared cash dividends of $0.14 per common share, consistent with the previous year[230]. - The number of common shares outstanding increased to 120,737,908 from 120,026,220 year-over-year, reflecting a slight increase in equity[230]. - The company has $35.3 million remaining under its $50 million stock repurchase plan as of September 30, 2024[326].